Legal disputes and lawsuits can deplete resources and ruin a company’s reputation, so having business insurance provides a financial safety net to cover legal fees and any awarded damages.
Different forms of business insurance cover various risks. For instance, general liability protects against claims related to bodily injury and property damage while professional liability (also referred to as errors and omissions insurance) covers negligence or mistakes in services offered by businesses.
Liability Coverage
Liability lawsuits are one of the most frequent forms of legal disputes facing businesses today, typically when customers or other parties allege harm was done to them by either accident or intentional act by one of their products or services. When this type of case goes to trial, liability coverage from business insurance helps pay damages awarded in favor of the plaintiff as well as associated legal fees and medical costs if successful.
Litigation disputes can be financially crippling for businesses, particularly small and mid-sized ones with insufficient reserves to pay any resulting judgment or settlement. No matter the validity of a claim, having adequate liability coverage can help companies reduce risks while safeguarding their financial health.
Business insurance provides an array of liability coverages to fit the unique needs of each company. General liability, usually included as part of a business owner’s policy (BOP), covers bodily injuries and property damages that occur on company property while commercial auto coverage protects from injuries sustained when employees drive on behalf of your organization.
Errors and omissions insurance (or professional liability coverage), provides protection for any errors committed by employees – including leaders – within your business. Directors and officers liability provides specific protection for executive teams from allegations such as mismanagement, breach of fiduciary duties or any wrongful acts while serving.
Property Coverage
Property coverage provided by business insurance can help safeguard against losses related to damage, theft and other incidents that cause financial strain for small businesses. Repair or replacement costs alone, along with legal fees and lost revenues, can be enormously costly – this is why property insurance, often included as part of a Business Owners Policy (BOP), is essential.
Lawsuits concerning intellectual property of products or services can also cause businesses significant financial damage. Competitors frequently bring these claims, which can prove quite expensive; thus having this kind of insurance in place is crucial if any business wants to remain competitive and successful.
Liability claims such as slip-and-fall accidents or product liability lawsuits are an unfortunate part of doing business, often being costly and time consuming to defend even when without merit. Without appropriate business insurance policies in place, even one lawsuit could force your doors shut for good.
Business insurance policies cover damage caused by weather-related incidents as part of their coverage, but disputes often arise regarding how much or if any amount should be reimbursed by insurers for these claims. Resolving these disputes often requires extensive documentation and persistent communication with the insurance provider in question.
Business Interruption Coverage
Business interruption coverage from commercial insurance can assist businesses if their operations are interrupted due to damage to property. It covers the time needed to restore operations back to normal as well as additional expenses that go beyond regular operational costs, for instance renting similar machinery while repairs are underway.
Dependent property coverage provides protection for businesses if a nearby company experiences property damage that leads to its closure; extra expense coverage typically covers items like moving employees into temporary locations, paying overtime wages for staff members or hiring temporary staff as necessary to keep essential services operating during a disruption.
COVID-19 and ongoing political unrest present businesses with unique risks; risk professionals can help their clients address those risks by crafting an appropriate business insurance policy to minimize risks and protect investments. They will work with their clients to make sure the policies in place address legal disputes or natural disasters quickly and efficiently.
Employee Discrimination Coverage
Businesses may face various types of litigation that threaten them, including personal injury, contract disputes, intellectual property infringement and employee discrimination claims. Personal injury suits arising from customer injuries on company property may prove expensive to defend while discrimination claims and wrongful termination lawsuits can also cost hundreds or even thousands in legal costs and medical expenses to defend. Insurance can provide valuable protection from these claims by covering legal fees and medical expenses associated with these litigation proceedings.
The #MeToo movement has brought new awareness to employment issues, prompting employees to file more wrongful termination and sexual harassment suits against their employers. Employment practices liability (EPLI) policies protect companies against claims that their workplace violates federal or state employment-related regulations such as the Americans with Disabilities Act. Small businesses can get EPLI coverage as an endorsement on their Business Owners Policy or standalone policy with higher limits and more comprehensive protection.
Preventing lawsuits by creating clear workplace policies and informing employees about discrimination and harassment. Furthermore, creating record keeping systems and training programs should also help safeguard businesses against costly legal disputes. An experienced lawyer can be invaluable when creating plans and devising strategies to defend them from legal disputes that could prove costly for your business.
